Marketing high street fashions - Essay Example

? Marketing high street fashions in today’s economy BY YOU YOUR SCHOOL INFO HERE HERE Marketing high street fashion in today’s economy Introduction Major fashion designers and businesses providing high end clothing and accessories in today’s economy have mixed results in terms of gaining customer loyalty and ensuring profitability. Well-known designers such as Gucci, Prada and Burberry (only to name a few) have had considerable difficulty in establishing a consistent marketing and advertising scheme due to situations occurring in the external environment. There is currently a lingering recession in the UK and abroad that is radically changing the buying behaviour of consumers that were once devoted and loyal to their favourite brand names. This difficult economy and changing consumer sentiment, along with rising competition, is changing the nature by which high street and other high-end retailers market their products. This report identifies how fashion companies segment their customers in the current economy along with discussion about how companies now differentiate to gain loyalty and correct their image problems. Segmentation, targeting and communications In the past, high end retailers like those commonly found on High Street in London used to segment their most relevant customers by needs and lifestyle, along with resource availability depending on their social class. However, with rising competition from fast fashion, lower-end retailers acting like high-end fashion retailers, this philosophy has changed. Western models of segmentation such as the VALS2 Network which describes eight different lifestyle and resource tendencies of key markets are not as effective as they once were. This model describes active lifestyles versus more sedentary buyers with traditionalist values, as two examples, in order to help marketers identify with key needs, values and attitudes (Boone & Kurtz 2007). However, the current recession is changing even the buying behaviours of the most elite of customers who are looking for more value in their fashion purchases. Banister & Hogg (2004) identify that self-esteem has been one of the most important motivators for the consumption of symbolic goods, including fashion. Self-esteem, as related to high end fashion merchandise, involves how a consumer feels about the enhancements that fashion clothing adds to their lifestyle or image that directly impacts their final decision to select key branded merchandise. Self-esteem is also comparative to others in society, their own reference groups such as peers and celebrities, that provides the motivation to make high-dollar purchases in order to fit their own mould of what constitutes success and wealth. However, understanding what drives trend-based self-esteem requires a significant investment in primary research, such as the use of questionnaires and surveys, and the information is not beneficial over the long-term due to changing values and social conditions. Companies that are finding themselves with strapped and tight budgets do not have the resources or the labour investment to conduct complicated psychologically-based primary studies consistently and must find new methods to target and segment their key customers most likely to make purchases and be loyal to the brand. Therefore, segmentation in high-end fashion retailers occurs differently today, amidst a difficult economy with rising competition globally. Geographic segmentation occurs regularly, especially for high-street retailers with a great deal of their support coming from local consumers in the London region with adequate resources to make purchases or those unaffected by the difficult economic conditions plaguing European countries. This is rather straight-forward for many fashion companies as it helps divide catalogue distribution and ensure that the right customers receive this literature to promote products. Today, primarily, marketers use psychographic segmentation strategies to understand buyer behaviour and gain presence in key markets they have identified. Even though the costs are significant to conduct primary studies, as has already been identified, it is necessary to understand those buyers who are most image-conscious, action-oriented and willing to make purchases on impulse, and those who are attracted to premium products (Boone & Kurtz). Some of the data required comes from in-store promotional materials and surveys filled out by loyal consumers, whilst other information comes from attending trade shows and catwalk events to understand what is driving current social trends in fashion. These are low cost methods of identifying key market attitudes and values and also direct, primary discussion with buyers in high-resource markets to understand what types of clothing and accessories they find most favourable. Only after this data has been identified can companies determine what avenues to take in terms of fashion offerings and adjustment of current supply chain methodology. In order to target key customer groups after identifying psychographic segmentation principles, the companies must determine a proper methodology for positioning. This is placing a certain product, keyword or location with key markets by changing their views about the company in relation to existing competition (Trout 2008). For instance, some high end retailers focus on quality in terms of the fabrics or other key colours used as a means of standing out amid competition whilst others use product class or pricing as a tool to target needs once they have been identified through market research. Targeting in this difficult fashion market also consists of using the appropriate advertising tools or integrated marketing communications strategies to deliver a consistent message based on the positioning strategy chosen by the company. Some companies rely on catalogue distribution or other direct mailing literature with incentives or the use of celebrities within the ad content to drive more motivation to select their brand over competing fashion brands. Targeting can also occur in-store with sales representatives that have been trained on the psychological dimensions of buyer behaviour and therefore act as part of the entire IMC campaign. It is unique to each type of business and the types of clients they serve that determines how best to target customers using psychographic literature, incentives, pricing reductions or other key selling points. Today’s technological breakthroughs and the social mainstream use of the Internet and social networking is one method by which companies target their customers and deliver their integrated marketing communications packages. ASOS is one example of a competitor that relies, today, on the Internet in order to target customers effectively. Using linkages to social media, this company allows for customers to leave commentaries, both negative and positive, in order to understand what customers think about their products (McEleny 2009). This interactive forum provides real-time data for use in future targeting and segmentation and also gives this fashion retailer a new relationship with buyers in key target groups. Marks and Spencer is another organisation that is using technology to enhance its fashion offerings. The company which attempts to compete with high street retailers has begun a process known as click and collect which allows customers to order their non-food items on the Internet where they can pick up the merchandise in-store, even in their grocery facilities (Felsted 2009). This provides a new convenience to fashion buyers that do not even have to go into the fashion stores to ensure they receive excellence in modern customer service. It seems that other retailers are following this model, using either convenience or social networking to expand their messages and gain new ground with existing customers or collect new buyers. Most high end retailers wish to avoid cheapening their brand and therefore explore new methods of gaining customer attention using the Internet as a low cost and effective tool for communications and promotion. Differentiation and brand loyalty Differentiating products, especially in the face of low-end retailers posing as high-end fashion retailers, such as Zara, is difficult in today’s recession economy. Shellys, an upscale high street shoe boutique, differentiates product through tangible representation and ever-changing styles that are unique to the business. Unique products such as gold metallic sandals, zip-front shoe boots and button detail midi high boots are only a sample of the different products available to outperform other shoe boutiques (Young 2008). The company works with their supply chain vendors to provide unique colours such as hot pink and metallics to gain ground with the younger demographic (Young). This is differentiation through product and using appropriate catalogues and print advertisements to send a consistent marketing message about their unique style in terms of quality and product class. According to one CEO at a high end retailer, “There is a demand for designer fashion at markdown prices and when it’s presented at a private sale, it gives the consumer the idea that they are within an inner circle” (Anniss 2009, p.5). Private sales avoid the cheapening of the brand, however still being able to promote sales and discounts to customers without the general public being aware of these private sales. Such communications are delivered to existing customers that provide a sense of exclusivity and motivation to bring them into the store. Differentiation occurs within the specialized activities associated with the private sale such as food and drink or one-on-one service with well-trained in-store salespersons to enhance the experience. Sometimes the level of quality of these private sales boosts their customer loyalty and differentiate through service elements. Word-of-mouth is another outcome of these types of private sales that brings in new customers interested in joining such events. “Discounting is a dirty word in this sector” (O’Connor 2008, p.1). Many companies, one of which is Liberty of London, has been forced to provide discounts (significant discounts) of 20 to 60 percent in order to earn short-term cash during a struggling economy. Businesses forced to discount want to avoid the sale poster in the store that only serves to erode long-standing brand reputation and bring undesired customers into the store. Many companies on high-street want to retain their sense of class status or exclusivity and will avoid sale promotions at all costs. Private sale websites, again, is the best methodology of differentiation when discounting is a necessity during short-term economic downswings. Other companies, such the The Body Shop on high street, cater to high resource consumers. The company develops short term alliances with other well-known brands as a means of expanding their marketing presence and communications. This business, though not necessarily fashion-oriented, sells products associated with high-end buyers in a region of London where fashion is primary. Guerrilla marketing is how this particular company differentiated its products during this alliance, actually taking their products to the streets for sampling and knowledge expression from well-trained marketers (Marketing Week 2009). Other high street retailers are turning toward guerrilla marketing to gain ground with buyers in a real-time shopping environment out-of-store. Pricing as a differentiation strategy is also being used by some of the most high-end retailers. Burberry recently reduced their clutch bags geared toward the socially-conscious consumer by up to 40 percent (Pearson 2009). Ralph Lauren and Armani have also marked down some of their most favourite lines by up to 50 percent whilst Whistles, another upmarket fashion company, reduced some merchandise by 75 percent to show they were more generous in short-term discounting than other high-end retailers (Pearson). Even though discounting is a dirty word in this particular high-end market environment, pricing is a tool to gain differentiation amongst competition and cater to the new value-conscious buyers in a struggling economic environment. Price reductions, despite their potential for long-term damage to profitability, is the most widely used methodology to gain brand loyalty from customers who are, today, willing to defect based on cost. These are, however, short-term strategies to ensure they earn desired profit and remain a well-known brand in key markets. Loyalty is also ensured by developing new and innovative training methods for in-store salespersons that take customer service to a new level, such as the aforementioned offerings of food and drink during their experiences. Any innovation that enhances the buying experience is how retailers are forced to gain new ground with buyers especially in the face of rising competition from low-end retailers posing as high street fashion organisations. How these innovations are approached and managed seems to be unique by the individual company that adopts them. Image and brand reputation “Fashion is not simply to be explained as the means by which a social elite maintains its dominance. An elite is said to set a fashion as a response to emulative behaviour by others” (Sedgwick 2004, p.37). Elitism and exclusivity are key elements of the high end fashion industry and companies must adopt a methodology to gain customer attention and satisfaction by providing unique products that serve to enhance their perceptions and needs associated with social class and social standing. Many of the high street retailers such as Armani and Gucci (as only two examples) maintain their image by providing quality clothing that is unique and unable to be duplicated within a certain fashion season. One method is to ensure that these companies have innovative designers on their team and fashion buyers that understand, fully, the need for exclusive product offerings. Other companies, to satisfy this elitism and the tendency of buyers to emulate others in their reference groups in the fashion environment, rely on celebrity endorsements to build a better image. Kate Moss for Burberry, Mary Kate and Ashley Oleson, and even famous sports celebrities are used to enhance image, even though the costs of recruitment and contracting are significant. Reference groups are a significant part of advertising due to this propensity of consumers to emulate the behaviours of others in their social environment. Burberry is one fashion organisation that considers itself to be “the most iconic British luxury brand with a global reach” (Bussey 2009, p.1). This retailer builds a better image through the use of the Internet and digital communications providing in-your-face and unique advertising communications content that supersedes other retailers. Mobile applications and social community platforms provide Burberry and opportunity to build real-time relationships with their customers and build even more brand loyalty with existing buyers (Bussey). Through interaction with information technology support specialists, Burberry can target important social networking sites and provide customers with ever-changing ad content that makes the company stand out from competitors who are struggling in the recession environment. Changing advertising companies is another method of improving reputation and image, especially when sales are on the decline and consumers are not as responsive to ad content as they once were. Ad agencies, today, are often seen as “too broad in their strategic approach and lack an understanding of the intimacy, heritage and prestige of luxury fashion brands” (Williams 2009, p.11). This is a specialist industry where style is a primary motivator for purchasing by important market segments and therefore require advertisers, when externalized, to understand these dimensions before launching a new ad campaign. To improve image, some companies are taking more control over their advertising content and distribution, along with timing in an integrated marketing communications programme, to avoid such misinterpretations. Changing advertisers or gaining more control over the process internalizes the communications process and provides new opportunities for familiar staff to develop innovations. Zara is quickly becoming a competitor to many high street retailers due to their fast fashion methodology that provides unique fashions at an affordable price to lower-end buyers. How do they accomplish this? This is done through a complete and radical redesign (as well as ongoing) to the replenishment cycle and supply chain. Zara achieves rapid prototypes of new fashion merchandise and short development cycles due to having significant control over manufacturing and the overall purchasing system (Tokatli 2008). In this case, marketing in terms of distribution and production gives Zara an advantage over its key competitors and even some high street retailers as procurement occurs rapidly, within budget, and is able to provide customers with variety in small batch quantities. If other high street retailers maintained more control over the raw materials and purchasing process, marketing could assist in building more innovation in product offerings and secure a better reputation for exclusive fashion offerings. Whilst other competitors in the high-end market attend public catwalk shows and other trade events, they are learning about fashion trends at the same time and to the same level as competitors. Zara utilizes its own design teams to make innovation a regular part of their manufacturing and sales processes. Therefore, it should absolutely be said that marketing can assist in defending a brand’s reputation and improving it as well. New information about style and preferences does not have to be gleaned from trade events or modelled shows especially since nearly all fashion buyers and labels attend these events and therefore gain the same information. Clearly, positioning is a major selling point for differentiation, however image is not going to be defended or improved when all other competitors are vying for the same type of trend-based fashion provided by these events. There really does seem to be a trend toward improving the customer service elements of the buying experience, such as in private shows and sales, that bring a new level to image protection not found in across-the-board buying behaviour based on trade shows and catwalk events. Conclusion Customers in the high street, high-end markets are being segmented based largely on lifestyle as was identified associated with psychographics and distinct behaviour related to reference group; far beyond that of just geographic segmentation for High Street. Targeting these customers depends on location and attitudes or values of key buying segments based on interactive activities or through primary marketing studies on consumer behaviour. Differentiation is necessary through positioning and delivering new levels of product quality or through pricing strategies, without cheapening the brand or lessening its reputation for exclusivity through massive price reductions. Gaining loyalty, it would seem, is accomplished best by redirecting marketing communications to existing customers and providing them with offerings that are innovative and also with a focus on total service quality. Social networking satisfies low-cost marketing in a difficult economy and also provides opportunities for a more interactive and personalized relationship with buyers in key segments. All-in-all, the high end fashion market must remain devoted to exclusivity in order to guarantee sales results and better image protectionism. References Anniss, E. 2009, ‘Innovative retail ideas go on the net’, Financial Times, London, June 15, p.5. Banister, E. & Hogg, M. 2004, ‘Negative symbolic consumption and consumers’ drive for self-esteem: the case of the fashion industry’, European Journal of Marketing, vol.38, no.7, p.850. Boone, L. & Kurtz, D. 2007, Contemporary Marketing, 12th ed. Thomson South-Western. Bussey, N. 2009, ‘Burberry hires BBH to lead ad strategy’, Campaign, August 24, p.1. Felsted, A. 2009, ‘M&S in further push online’, Financial Times, London, October 12. Marketing Week. 2009, ‘Holland & Barrett launches Body Shop challenger range’, London, June 4, p.6. McEleny, C. 2009, ‘ASOS launches site showing real-time customer opinion’, New Media Age, London, November 19, p.4. O’Connor, S. 2008, ‘Luxury retailers resort to secret sales’, Financial Times, London, December 20, p.1. Pearson, S. 2009, ‘Luxury labels feel the pinch’, Financial Times, London, July 18, p.4. Sedgwick, P.H. 2004, The Market Economy and Christian Ethics: New Studies in Christian Ethics, Cambridge University Press. Tokatli, N. 2008, ‘Global sourcing: insights from the global clothing industry – the case of Zara, a fast fashion retailer, Journal of Economic Geography, vol.8, October, pp.21-38. Trout, J. 2008, [internet] The New Positioning: The Latest on the World’s #1 Business Strategy, Genii Group, [accessed June 13, 2011 at http://www.genii-group.com/pdf/book_review_the_new_positioning.pdf] Williams, M. 2009, ‘Do fashion brands need an agency?’, Campaign, August 28, p.11. Young, S. 2008, [internet] ‘Fashion shoe brand Shellys now available online through ASOS.com’ [accessed June 14, 2011 at http://www.openpr.com/news/32536/Fashion-Shoe-Brand-Shellys-Now-Available-Online-through-ASOS-com.html] Read More